Core Insights - The Brazilian Central Bank's latest Focus Report indicates stable market expectations for inflation, economic growth, interest rates, and exchange rates for 2025 [1][3] Inflation - The market predicts a 2025 inflation rate of 4.83%, consistent with the previous week and slightly lower than the 4.86% forecast four weeks ago [1] - For 2026 and 2027, inflation expectations are 4.29% and 3.90%, respectively [1] - In August, Brazil experienced its first deflation since August 2024, with the Consumer Price Index (CPI) decreasing by 0.11% month-on-month, and the National Consumer Price Index (INPC) dropping by 0.21% [1] Economic Growth - The expected GDP growth for Brazil in 2025 is 2.16%, unchanged from the previous week and slightly lower than the 2.18% forecast four weeks ago [1] - Growth expectations for 2026 and 2027 are 1.80% and 1.90%, respectively [1] Interest Rates - The market anticipates that the benchmark interest rate (Selic) will remain at 15% in 2025, marking the 13th consecutive week without change [1] - Expected interest rates for 2026 and 2027 are 12.25% and 10.50%, respectively [1] Exchange Rates - The market forecasts the USD/BRL exchange rate to be 5.50 by the end of 2025, slightly lower than the previous forecast of 5.59 [2] - Predictions for 2026 and 2027 remain at 5.60 [2] - The current spot exchange rate is approximately 5.32 [2] Market Sentiment - The Focus Report reflects market confidence in the economy, with the Central Bank's monetary policy committee noting increased risks for emerging markets due to global economic slowdown, U.S. policy uncertainty, and geopolitical tensions [1][3]